• If we want others to worry about whether their treatment of us is right and just and fair, then we have to worry about our treatment to them – this is called reciprocity (exchange) • Our concern for the quality of our own lives
Trust, Commitment and Effort • Trust, Commitment and effort is a 3rd moral action by managers that is build among all people (individuals, groups, and organizations associated with their organization. Their essentials are courage (a part of character) and integrity (the willingness to act on principle rather then preference).
o Moral responsibility – is the recognition of moral problems. It is the most essential managerial function of all. o Moral reasoning – is the process of examining and then resolving these recognized moral problems in a way that will be convincing to others. o Moral character – is the possession of the courage to first recognize a moral problem and then propose a moral solution. • Fair-to-all creates trust, that trust builds commitment and that commitment ensures effort.
Extended Organizations • It is an advancement of the stakeholder (is a person who is associated with a company-that can affect or is affected by the achievement of the organization’s objective) concept. It is a wider range of other firms and institutions, beyond the formal boundaries, and hierarchical controls of their own company. o Material and component suppliers – influences the quality and cost of that company’s goods and services. o Wholesale and retail distributors – influences the price of the product, the level of service and the degree of satisfaction received by the final customers. o Commercial banks, investment companies, research laboratories, and educational institutions – influences the long-term success of that company by providing personnel, technology, equity and debt. o Industry trade associations, public interest groups, and domestic and foreign political agencies – affect the performance of companies.
The help determine the following: ▪ The national financial policies that set tax rules and interest rates ▪ The national regulatory policies that influence product/process designs and environment requirements ▪ The national social policies that help to set educational achievement levels and health care costs ▪ The national infrastructure systems, which include the communication networks and the transportation methods.
Cooperation, Innovation and Unification • Moral management is necessary to achieve the cooperation, innovation, and unification that are so essential for success in a competitive global economy. o Moral management builds individual attitudes of trust, commitment and effort – This happens when a decision process has considered the interest and rights of each of the groups according to known, consistent, and communicated principles-then there should be an increase in trust, and commitment among all of the stakeholder groups and that increase in trust and commitment should, in turn, lead to an increase if effort.
o Individual attitudes of trust, commitment and effort lead to organizational behaviors of cooperation, innovation and unification. – The effort that results from stakeholder trust and commitment goes far beyond that which is based only upon financial incentives or commercial contracts. Stakeholder trust and commitment result in a willingness to contribute “something extra” o Organizational cooperation, innovation and unification is essential for competitive success in a rapidly changing global economy – With the committed attitude, the willing to contribute something extra, the readiness to act with energy and enthusiasm for the benefit of the full organization on the part of all of the stakeholders is far more important now than in the past due to the changed conditions of global competition (technological, product, market, process or customer changes). The thoughtfulness, speed and cost of the firm’s reactions to those changes or anticipation of them have become dependent upon the patterns or cooperation, innovation and unification (the feeling that “we’re all in this together) has become critical to the success of the firm.
Unify and Guide • Unify and guide takes the place of the outmoded “command and control” model • Unification is the key for the new method of management for extended organizations o Unification is bringing all of the stakeholders of the firm (those within the company, industry and society) together into an innovative and cooperative whole.
▪ It requires recognizing the impacts of company actions (benefits and harms) upon the stakeholders of the firm and then distributing the benefits and allocating the harms through a process that is acknowledged to be equitable and fair.
• The moral responsibilities of managers for unifying the stakeholders of an extended firm have to be combined with the practical responsibilities for guiding the actions of those stakeholders through the standard managerial methods of planning, investing, budgeting, measuring and rewarding. o The 1st few steps in this process involves defining the organizational values, setting the corporate goals, and preparing a mission statement combining those values and goals in clearly understandable and truly believable terms.
▪ The mission statement is the essential element that explains the reasons that a given company exists. That stated reason for existing have to reflect the values and goals that are meaningful for each and relevant to all of the various stakeholders, individuals, groups and organizations. • Corporate values – duties the senior executives of the firm should owe to the various individuals, groups and organizations associated with that firm who can affect the future performance and position of the company. • Organizational goals – The end points